Traders Adopt Dual ETF Strategies Amid Market Turbulence, Bitcoin Reclaims $90,000

Traders are adopting contrasting exchange-traded fund (ETF) strategies to navigate the unpredictable financial markets of recent times. This year has seen unprecedented inflows into ETFs that offer leveraged long exposure to volatile assets like stocks and cryptocurrencies, as well as funds holding risk-off assets such as cash and gold.

Leveraged ETFs are designed to amplify the daily performance of assets like stocks or crypto, often by two or three times. In 2025, leveraged long ETFs attracted net inflows of roughly $6 billion. Concurrently, inflows into cash and gold funds approached roughly $4 billion.

This surge in fund flows coincides with a spike in market turbulence following the announcement of sweeping tariffs on US imports. Since then, the S&P 500, an index of large US stocks, has experienced a decline in value. Bitcoin (BTC), however, has shown resilience, reclaiming $90,000 per coin for the first time in six weeks on April 22, with Bitcoin ETFs seeing nearly $1 billion in net inflows.

Bitcoin has often been referred to as “digital gold,” but it still has a weak correlation to the safe-haven asset and trades more in line with equities. Its correlation with gold has averaged around 0.12 over the past 90 days, compared to 0.32 for equities. The key question remains whether BTC can return to its long-term pattern of low correlation with equities, as gold remains a preferred safe-haven asset for most investors.

Analysts note that traders are employing a dual strategy of buying the dip and hedging against further volatility. This is evident in the record flows into both leveraged long ETFs and cash and gold ETFs. The strategy reflects a cautious optimism among investors, who are positioning themselves to benefit from potential market rebounds while also protecting against downside risks.

The increased volatility has also led to a rise in the use of financial derivatives, such as futures, as traders seek to capitalize on market movements. This trend is likely to continue as investors look for ways to navigate the uncertain economic landscape.